Credit Card Costs

November 24, 2013

credit card fanout

For bank, trust company, and credit union cards:

  • The interest is calculated on a daily interest basis and payments immediately reduce the daily balance that is subject to interest. So, if you make payments between statements, you save money. Presently the interest rates charged range from (5% per annum to 23% per annum)
  • Interest is charged on cash advances from the day you borrow until they are paid in full.
  • Interest is not charged on purchases showing up on your statement for the first time IF the entire statement balance is paid by the due date.
  • Do Not Forget - When the balance is not paid in full by the due date, interest is charged on the daily balance from the date purchases have been posted to the account until it is paid in full. Check the terms and conditions as interest is sometimes charged only on the unpaid balance, sometimes on the total amount of the bill, regardless of the fact that you may have paid most of it off.

Other Credit Cards:

  • In most cases you pay less interest if you pay off at least half the balance each month. Retail stores (except in Quebec) subtract payments equal to 50% or more of the balance from the balance on the statement before charging interest. In Quebec, interest is calculated daily so in that province, you save money if you make payments between statements.
  • Interest is compounded, so if you miss a payment, the next month you will pay interest on the balance plus interest. Average interest rate charged is @ 15.8% per annum.

Charge Cards: (Any card requiring payment in full each month)

  • The American Express and Diners Club/ En Route account balances are due on receipt of statement.
  • A delinquency assessment equal to 30% per annum is charged on unpaid balances.
  • Cards are cancelled if balances remain unpaid.